Make It Meaningful: Why Customer Satisfaction Should Be Part of Your Bonus Equation

Customer satisfaction should be in the bonus equation

Projects and clients come and go. What works for the Joneses may not work for the Smiths. But what doesn’t change is your employees.

So what do customer satisfaction surveys say about your staff, and what do you do with that information? “We use [surveys] for evaluations and bonuses,” says Brian Ciota, vice president of McClurg Remodeling & Construction Services, in Syracuse, N.Y., which uses GuildQuality to survey clients at the end of every project; an in-house–created survey is used for small handyman jobs.

Completed surveys are passed out to every employee who worked on the project for their feedback. And at the monthly all-company safety meeting, Ciota says, all the survey review sheets are brought forward and discussed, to see how the business is doing overall.

Keeping Score

Most competent companies will get a score of 3 or 4 (top scores) on customer satisfaction surveys. But “that 3 average doesn’t hold much value,” says Jeff King, owner of Jeff King & Co., in San Francisco, who also uses these surveys as one element in his bonus structure. “The recommendation rate … is the litmus test,” he adds. The same holds true at McClurg, where “the customer service rating must be 3 or better and the customer must be willing to refer us” for an employee to receive a bonus, Ciota says.

King gives bonuses twice annually based on the company’s net profit; client satisfaction as measured by a GuildQuality survey; department goals; personal goals; and peer review. The customer satisfaction piece is 30% of the dollars involved.

As for personal goals, King admits that they can be complex, but “everyone has to come up with three individual goals [that are related to their work] for every six-month period, and those have to be agreed on with their manager.” Both King and Ciota say their bonus systems are written processes that are part of company culture.

Whether bonuses work or not is an ongoing debate among business gurus, but most agree that awarding bonuses tied to something specific over which the employee has control does create an incentive and will make a bonus more meaningful.

—Stacey Freed, senior editor, REMODELING.